Thursday, April 20, 2017

Capitalism Is A Destructive Living Thing

Capitalism inevitably and by virtue of the very logic of its civilization creates, educates and subsidizes a vested interest in social unrest.

Joseph Schumpeter, the Austrian-born American economist, political scientist and Harvard professor wrote those words in his book, Capitalism, Socialism, and Democracy. Professor Schumpeter was the Finance Minister of Austria before he became a Harvard professor.

Capitalism is a living thing. Capitalism is constantly in motion and the system continually reinvents itself in order to survive. In the process of reinventing itself, Capitalism creates social unrest. As Schumpeter mentions, there is an element of creative destruction in a capitalistic society. Entrepreneurs are, by design, the destructive force that supports economic growth. Entrepreneurs destroy long-established companies, and they undermine the institutional boundaries of Capitalism. They keep investors happy while they look for difficult developments and unsustainable growth. Capitalism inevitably leads to some type of socialism.

We often wonder why the world acts and reacts the way it does. The global economy is the grandchild of basic Capitalism. It is capitalism on steroids, and those steroids are causing a great deal of negativity in the world. The negativity surfacing from Capitalism is manifested in political elections, social programs, religious teachings, and economic decisions. Capitalism rules politicians, educators, healthcare professionals, and even social workers. In order to get anything accomplished, people must think and act in a capitalistic way.

The eventual demise of Capitalism is not upon us, but it is imminent. An element of self-responsibility is boring holes in the walls of Capitalism. A spark of socialism is in the air, and eventually, that spark will become a flame. The flame of socialism, as Schumpeter said, is the product of Capitalism, and socialism is not all bad. Socialism of some kind will light the way and create a sense of social calm in future generations.